The GBP/USD opened in Asia at 1.9765 after surging to 1.9848 Friday when US ISM data opened up a torrent of USD selling. The GBP/USD raced to 1.9841 in early Asia when the USD fell against the field led by EUR/USD where stops above 1.3350 were triggered to a high of 1.3370.
The USD managed to turn around later in the morning when good buying of USD/JPY emerged from Tokyo names and the GBP/USD slipped all the way back to 1.9775/90 where it settled for the balance of the session. The EUR/GBP popped up from 0.6735, where it closed on Friday, to 0.6747 in very early Asia when the EUR/USD stops above 1.3350 were triggered. The cross settled back at 0.6730/35 later in the morning when the USD gained back some of the lost ground and forced fresh EUR/USD longs to pare back. Sentiment towards the GBP/USD is red-hot bullish with the weekend press calling for a move to and above 2.00 any time now.
The GBP gains on the central bank reserve diversification story and there is talk now of real money funds rotating out of US stocks into UK shares. The one factor that may keep the GBP/USD is check is the fact that the market is very long.
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